Could your team use another hand or a few extra hours in the day? It’s easy to feel understaffed in procurement, but maybe more help isn’t the answer: the Hackett Group found that world class procurement departments have 27% fewer employees.
Using Time More Wisely
Smaller teams and better results? Perhaps they’ve managed to escape the time-wasters that many sourcing teams get sucked into. This article identifies six of the worst time sinks and offers ideas that might help your team sidestep them.
Time-Waster 1: Data Cleanup
Sometimes the “getting ready” part of procurement feels like the biggest part of the job: collecting data, scrubbing data, mapping data, and so on.
Try This: Let your vendors know that you need data from them in the format you specify. Also look at new analysis tools that use artificial intelligence to automate data work.
Time-Waster 2: Convincing Stakeholders
We expect challenging negotiations with vendors, but it’s demoralizing when the toughest part of the job is convincing those we are here to help.
Try This: Don’t open stakeholder conversations with your seven-step sourcing process or by demanding more; instead ask them what their current challenges or goals are. Whenever possible, connect sourcing activities to solving their problems. Then you won’t need to convince anyone.
Time-Waster 3: Chasing “Rogue Spending”
More compliance and centralized buying usually bring more savings. This reality turns many sourcing teams into policy police, peering over cubicles to find offenders. (This isn’t just a time-waster, but a major killjoy.)
Try This: Let robots do repetitive work. Automate exception reports that spotlight off-policy spending (AI tools can make this easy and almost real-time working from expense reports and credit card statements). Post and praise the groups with highest compliance… and let the system send notifications with the cost of non-compliance to the respective P&L owners.
Time-Waster 4: Perfecting Cost Models
At some point there are diminishing returns in accounting for every scenario and variable in the name of a “robust” pro forma. In the end, every cost model is largely dependent on assumptions.
Try This: Adjust expectations to aim for an 80% correct model, and ask for early involvement in reviewing the model and identifying the key assumptions. Wider buy-in may speed the process and reduce the pressure for a perfect model.
Time-Waster 5: Purchasing Paperwork
Too much process and documentation can have a devastating impact on productivity. We often share the burden with our users.
Try This: Rely on AI reporting more than initial process where possible, add higher threshold layers, and look for steps that can be removed. You’ll become a hero with your stakeholders.
Time-Waster 6: Revising RFPs
A successful procurement needs clear requirements, and it’s often the case that time invested up front will save both time and money later on. But that doesn’t mean the initial RFP has to be comprehensive or perfect. Protracted RFP preparation delays savings and solutions, often without improving either.
Try this: Define clear business goals and success metrics in your RFPs but go light on specific requests and solutions. With less direct guidance, you may find vendors are more innovative in their responses, and you can always revise and communicate more as needed.
More Effective Procurement
There’s a world of AI technologies with enormous potential to drive supplier innovation, trim costs and reduce risk. By scaling back on these six time-wasters, procurement professionals can reallocate their time to initiatives with long-term value. It’s the first step in transitioning procurement from an operational, to a strategic role in your company.